FCA’s own liquidity management review casts doubt on LTAF decision
The AIC has responded to the FCA’s review of liquidity management in asset managers.
The Association of Investment Companies (AIC) has responded to the FCA’s review of liquidity management in asset managers. This follows the AIC’s comments about the retail distribution of Long Term Asset Funds (LTAFs) last week.
Richard Stone, Chief Executive of the Association of Investment Companies (AIC), said: “The FCA’s review casts doubt on the decision to extend LTAF distribution to the wider retail market. It’s worrying because the FCA’s concerns in this review were about funds holding liquid assets. These problems have the potential to be far greater when the assets are illiquid as they will be in an LTAF.
“Following these findings, it’s difficult to have confidence in the ability of LTAFs to deal with liquidity and redemption challenges. Manufacturers and distributors need to carefully consider how they approach any decision to offer these untested products to retail investors, and whether doing so meets their obligations under the Consumer Duty.”
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